Incentives support plants worth R22bn

INVESTMENTS in 13 new and extended manufacturing projects to the tune of R21.7 billion have been approved.

The investments will be supported by government tax incentive schemes and hope to create 1 618 direct jobs.

Trade and Industry Minister Rob Davies, who spoke at the launch of Safal’s steel plant at Cato Ridge in Kwazulu-natal yesterday, said the incentives were aimed at encouraging greater energy efficiency in the manufacturing sector and strengthening the industrial skills base.

Safal, which qualified for R39 million from the tax incentive scheme when it was setting up in 2010, officially opened its R1bn steel plant yesterday.

Davies said R30m, of which R22m had already been paid, would come from the department’s Enterprise Investment Programme and R9m from the Industrial Development Corporation’s critical infrastructure programme.

Mauritius-based Safal had created 370 jobs in ethekwini and Pietermaritzburg and planned to expand its plant to 100 percent capacity from the 80 percent in operation now.

Among the companies set to benefit from this incentive was Nestlé Cereal in Gauteng, which would construct an extrusion-based operation to produce Cheerios and Milo coated breakfast cereals at a value of about R531m.

Arengo 361, a R1.7bn bioethanol plant in Cradock in the Eastern Cape, would produce commercial fuel-grade ethanol. Output was expected to start in May 2014.

Unilever South Africa would also construct a state-ofthe-art facility for liquid personal care products, with total investment of R1.1bn.

Davies said two plants in the Eastern Cape would be the first investments to respond to the country’s biofuels strategy.

Other companies to benefit included Rainbow Nation Renewable Fuels, National Ceramic Industries South Africa and a fertiliser division of Omnia.

A revised section of the Income Tax Act would allow the minister to offer enhanced incentives for investors in industrial development zones.

As part of the enhanced offering, he said, investors locating preferred projects in these zones would be able to receive an additional allowance equal to 100 percent of the cost of a project’s manufacturing assets.

The project had also committed to procure R3.7bn in supplies from small, medium and micro enterprises.